Updated: Audit commission to launch investigation of Dillon deal
HBJ PHOTO | Brad Kane
Hartford's Dillon Stadium
Editor's note: This story has been updated to include information about a subpoena of city records by investigators.
Hartford’s three-member Internal Audit Commission voted unanimously Wednesday to proceed with an investigation of the now scuttled Dillon Stadium deal.
IAC Commissioner Bruce Rubenstein was openly critical during the meeting of the city’s handling of the deal, and said the problems likely wouldn't have occurred if the city had listened to the IAC’s 2013 recommendation to hire a professional asset manager to vet financing documents.
That recommendation stemmed from an audit of Keney and Goodwin golf courses, which found that the courses’ then-operator had failed to make contractually required capital improvements.
The city’s decision to ignore that recommendation “set the stage for Dillon,” Rubenstein believes.
“We’ve been down this path already,” he said.
Police launched an investigation earlier this month and notified federal investigators.
Update: The IAC vote came less than 24 hours before federal investigators from the U.S. Attorney's Office subpoenaed City Hall for documents Thursday, Mayor Pedro Segarra's office confirmed to the Hartford Business Journal.
"The city has received subpoenas looking for documents and records," according to a written statement. "We welcome the process and are eager to cooperate to protect the city and its residents. We hope this will shed light on if, or where, any potential mistakes were made."
The Hartford Courant first reported the subpoena Thursday, and that a grand jury was being convened to investigate. A spokesman for the Connecticut U.S. Attorney's Office declined to confirm or deny that report.
The city has alleged that it was overbilled by Black Diamond Consulting Group for work related to the Colt Park soccer stadium — which Black Diamond wanted to overhaul in the hopes of getting a team into the North American Soccer League (NASL), where the New York Cosmos play.
Development director Thomas Deller resigned over the botched project after Council President Shawn Wooden asked Mayor Pedro Segarra to fire him.
The city council has recently raised questions about the authenticity of financing documents provided by Black Diamond’s James Duckett showing that he had $440 million in cash available to be transferred from Barclay’s Bank London.
And a Farmington architecture firm has sent a demand letter to Black Diamond — first obtained and published by the blog We The People — demanding more than $300,000 in payment owed and suggesting that the funds may have been diverted to another entity.
A Courant story detailing Black Diamond principal James Duckett’s prior felony embezzlement charge and a history of civil court judgments spurred the council to back away from a 49-year lease deal with the company early this month.
Rubenstein also alleged Wednesday that the city was trying to control the outcome of an investigation by hiring an external audit firm, rather than relying on the IAC to do the work.
Segarra said in a letter to Wooden last week that he had contacted the firm McGladrey LLP to do a forensic audit.
“It looks to me like it’s trying to protect somebody or shape the report to make it more palatable to the public somehow,” Rubenstein said.
It wasn’t immediately clear if the city had officially hired the firm to audit the Dillon deal.
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